Dive Brief:

• The sale of the Toll Brothers Apartment Living platform to real estate investment company Kennedy Wilson has increased by $33 million to $380 million, reflecting ongoing investments since the September announcement, according to the homebuilder’s fourth-quarter earnings report on Dec 8.
• In addition, the closing of the deal has been delayed to the first quarter of 2026. Initially, the sale to Beverly Hills, California-based Kennedy Wilson was expected to occur in October.
• In the earnings release, Toll Brothers Chairman and CEO Douglas. Yearley Jr. said that the company earned $4.58 per diluted share in the quarter, “which was modestly below guidance due to the delayed closing of the sale of our Apartment Living business that we announced in September.” Toll’s stock slid 4.8% on Dec. 8 after-hours trading due to the delayed closing, according to Seeking Alpha.

Dive Insight:

In September, Kennedy Wilson announced it was acquiring the Toll Brothers Apartment Living platform, including its in-house development team and its interests in a portfolio of completed properties and assets under development, for $347 million.

Kennedy Wilson also plans to acquire Toll’s general interest in 18 apartment and student housing properties and a pipeline of 29 sites at various stages of development.

Additionally, Kennedy Wilson will manage 20 apartment and student housing properties from the Fort Washington, Pennsylvania-based homebuilder, totaling over $3 billion in assets under management. Toll Brothers will sell those properties over time and exit the apartment business.

“As we exit the multifamily business, we anticipate using the significant cash proceeds from these transactions to both grow our core homebuilding business and return capital to stockholders,” Yearley said on Toll Brothers’ Q4 earnings call.

As part of the original deal, Kennedy Wilson will refer prospective for-sale housing opportunities to Toll Brothers. The builder will reciprocate with rental housing opportunities, creating a mutually beneficial pipeline of shared deal flow. 

Toll Brothers, like Miami-based public homebuilding rival Lennar, made big bets on the apartment business in the 2010s, as homebuilding slowed following the global financial crisis, according to Multifamily Executive.

However, both companies have cooled on the sector in the 2020s. Charlotte, North Carolina-based Quarterra Group, the multifamily subsidiary of Lennar, has been scaling down its operations over the past couple of years. 

In a deal that closed last June, New York City-based global investment firm KKR purchased 5,200 units from Quarterra for about $2.1 billion. In September, it sold another 1,400 apartments to QuadReal Property Group, a Vancouver, British Columbia-based global real estate investment, operating and development company.

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